Modern slavery | Regulatory Outlook June 2022

No plans for the UK to replicate the EU's proposal for Corporate Sustainability Due Diligence Directive

Following the European Commission's adoption of the proposal of a directive on corporate sustainability due diligence (see more on this in our earlier Regulatory Outlook), the UK government has now commented on it. 

In a letter written on 23 May, Lord Callanan (Minister for Business, Energy and Corporate Responsibility in the Department for Business, Energy and Industrial Strategy) stated that the UK government has no plans to replicate the EU proposal. Lord Callanan went stated that the government is "sensitive to the overall burden of regulation on our businesses", but supports approaches taken by UK businesses that conduct due diligence of their supply chains.

He further noted that the International Sustainability Standards Board is looking to develop international standards to harmonise environmental, social and governance reporting, which may include due diligence disclosures. He added that the UK government intends to bring forward proposals in order for the UK to adopt these standards for use by UK businesses.

The letter states that it is unclear how many UK businesses will be caught under the scope of the EU's directive, but considering it is only at an early stage of the legislative process, it will become clearer as it progresses and the government will be keeping on top of this. 

Commission launches call for evidence on prohibiting products produced using forced labour

On 23 May, the European Commission launched a call for evidence on effectively banning products produced, extracted or harvested with forced labour. The initiative aims to prohibit making available products, produced with forced labour, on the EU market, whether they are made in the EU or elsewhere in the world. As announced by Commission President, Ursula von der Leyen, in her State of the Union speech on 15 September 2021, further EU legislative action is needed to tackle the use of forced labour in the value chains of companies operating in the single market.

The call for evidence outlines that the existing legislation does not tackle the issue of products being placed on the EU market that are made with forced labour. It further states that the current initiatives on due diligence "do not address the products directly but rather target the economic operators, such as companies above a certain size or in certain sectors, and their supply chains (e.g. the proposed corporate sustainability due diligence directive and the responsible minerals regulation)." This therefore means that products made using forced labour could still be present on the EU market.

The call for evidence sets out that legislative measures will be adopted to effectively ban the placing on the EU market of products made wholly, or in part, by forced labour. The ban would cover both EU and imported products and it would be combined with a robust, risk-based enforcement framework.

The feedback period closes on 20 June 2022.